BlackRock faces fine over Telecom Italia stake

Italian watchdog Consob may fine the world’s biggest money manager, BlackRock, for not informing the regulator soon enough that it had increased its stake in Italy’s Telecom Italia, Consob’s chairman told an Italian newspaper.

At the end of November, BlackRock lifted its holding to 10.1% from the 5.1% it held in October, giving it a potentially pivotal role in a Dec 20 shareholder vote on whether to oust the board of the telecoms firm.

BlackRock informed the US Securities and Exchange Commission about its investment at the beginning of December but it did not tell Consob within a five-day deadline.

The regulator has asked the US group to make a stock exchange statement on what its stake in the Italian company is and whether it intends to be present at the next shareholders meeting on Friday, Consob’s Giuseppe Vegas told Italian daily Il Sole 24 Ore yesterday.

BlackRock was required to answer before trading started today.

“Our immediate reaction is the sanction procedure, we can impose a fine of maximum €500,000,” Vegas was quoted as saying.

Consob could also temporarily suspend BlackRock’s voting rights on the stake not declared, he said.

An official for BlackRock declined to comment.

With its November investment, BlackRock became the second- largest shareholder inTelecom Italia.

According to Vegas, BlackRock continued to buy shares in December. It is unclear by how much the US investor had increased its stake from 10.1%, he said.

Telecom Italia was also required to make a statement to the exchange on when it was informed by BlackRock about its investment by before the market opened today, Vegas said.